Hong Kong shares march higher while other Asian markets inch up

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Japan’s stock benchmark finished up 0.1% after having been down as much as 0.6%, while Hong Kong’s Hang Seng
HSI, +0.72%
, which slid Thursday along with its mainland counterparts, pushed solidly higher, ending up by 0.5%.

The Shenzhen Composite Index
399102, -0.30%
finished 0.1% lower, while the Shanghai Composite Index
SHCOMP, +0.91%
was 0.1% higher, as was the CSI 300, made up of the biggest stocks on both exchanges. All had finished the morning session down at least 0.5% after closing Thursday at two- or three-month lows.

The sudden stock weakness wasn’t a cause for alarm, said Iris Pang, greater China economist at ING, adding that it could happen again in the short term as fund managers reposition and reallocate money between bonds and stocks.

Moreover, with ING anticipating strong Chinese economic growth through at least next year and companies there posting double-digit earnings jumps, Pang said the bank doesn’t see a top for Chinese stocks—which have lagged behind others in the region this year.

Liquidity concerns helped spark Thursday’s stock slide, in part on recent weakness in China’s bond market; the 10-year yield
AMBMKRM-10Y, -0.52%
has been hitting three-year highs of late at just over 4%.

The People’s Bank of China put just a small amount of cash into the financial system Friday morning, as expected by some market participants, suggesting Beijing isn’t worried about stock jitters. The central bank injected a net 20 billion yuan ($3.04 billion), versus Thursday’s relatively large 100 billion yuan.

In Hong Kong, one of the world’s best-performing stock markets this year—up 36%—folks were buying the dip. It still looks “comparatively cheap by global market standards,” said Cai Lewis, a senior adviser at ASR Wealth Advisers. “And I think it has further upside, although further jolts on the Shanghai Composite could sour the mood short term.”

Elsewhere in the region, the Nikkei Stock Average
NIK, +0.65%
started the session in negative territory as Japan played catch-up following a Thursday holiday. A stronger dollar helped it recover: It rose to ¥111.50 from ¥111.20 in early-morning trading, having fallen from ¥112.15 when Tokyo equities trading ended Wednesday.

New Zealand’s benchmark
NZ50GR, -0.21%
was positive all day and ended up 0.3% at a high for November. Singapore’s Straits Times Index
STI, -0.60%
rose 0.6%, putting it on pace for a fresh 2½-year high.

Among regional laggards, Australia’s benchmark was held back by declines in major banks. The S&P/ASX 200
XJO, -0.64%
closed down 0.1%, after a similar slight drop Thursday.

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